Lending and borrowing cryptocurrencies has become an important sub-sector in crypto finance. Crypto lending and borrowing are fairly simple concepts where crypto HODLers earn passive income on their idle lying cryptos and traders on margin borrow cryptos for a specified interest rate with an expectation of getting more profits from the margin trade.
Any trader or crypto HODLer could earn this passive income on CoinDCX’s platform. Lending on CoinDCX does not require users to wait for borrowers. You can simply go on Lend and start earning. Read this step-by-step guide on Lend to know how to lend your cryptos on CoinDCX and the various advantages that the users get on our platform.
Why should I Lend Cryptos?
If you are a crypto trader or an investor who HODLs cryptocurrencies then lending on cryptocurrency exchanges is one of the safest ways to earn passive income. Lending your cryptos is essentially you lending the assets to margin traders who pay you the interest for borrowing your funds.
Compared to the interest rates that the banks offer, most cryptocurrencies offer an interest rate which is at par or more than that of the bank. Another advantage of lending cryptocurrencies is that not only do you earn interest payments for the duration of the lending period, you could also benefit from additional gains when the price of the cryptocurrency spikes.
Investors who HODL must lend their cryptocurrencies to get passive income on their idle lying cryptos. Traders on the other hand must lend when the market is not doing great. When the market has crashed and you are unable to sell your cryptos or trade in a bearish market, why not lend to other margin traders and earn some interest on it?
How to Lend Cryptos on CoinDCX?
Step 1 : Login to your CoinDCX account and click on the Lend button under the Earn dropdown list. In case you do not have an account, click here to see the tutorial on how to create an account on CoinDCX.
Step 2 : A list of cryptocurrencies will open on the screen. At the time of writing, CoinDCX provides lending options for Bitcoin (BTC), Tether (USDT), Binance Coin (BNB), Ripple (XRP), Ethereum (ETH), TrueUSD (TUSD), Tron (TRX), Bittorrent (BTT), Litecoin (LTC) and Neo (NEO). As mentioned in the image, users can lend for a minimum of 7 days and there is no restriction on the locking of funds. In case you need to withdraw your funds you can simply terminate your lending contract without any hassles.
Let us assume you have some Bitcoins (BTC) in hand and you wish to lend them on CoinDCX’s platform. Click on Lend BTC and go to the next step.
Step 3 : A new dialog box pops up where you mention the number of days you wish to lend your Bitcoins on CoinDCX’s platform and the quantity of Bitcoins (BTC). Let us take an example where you believe that you will not be trading for the next 12 days and your funds will lie idle. How can you make your wealth make money for you? Lend them on CoinDCX. Select 12 days and the quantity of BTC (0.5 BTC here). Click on Lend and confirm it.
Lending on CoinDCX requires only 2 steps. Let us take a look at some of the features of Lend.
- Lend allows users to earn passive income on their idle lying cryptocurrencies.
- Lending on CoinDCX is available for 10 cryptocurrencies as mentioned above. These cryptocurrencies belong to a diverse group of sectors ranging from currencies such as Bitcoin (BTC), Litecoin (LTC) and Ripple (XRP), stable coins such as Tether (USDT) and TrueUSD (TUSD), centralized exchanges such as Binance Coin (BNB) and smart contract platforms like Ethereum (ETH), Neo (NEO) and Tron (TRX). This talks a lot about the diversity of options we have when it comes to lending cryptocurrencies.
- Your duration of days starts from the time you confirm.Once your lending period is over, your interest along with your principal quantity of crypto gets credited into your account.
- In case you wish to terminate your lending contract, you may simply go on the same page and terminate it. You are not fined for doing it but you do not receive the interest on your cryptocurrency either. It is therefore advised to lend for the number of days you wish to lend the product and not for a very long period.
- Interest rates keep changing from time to time. This interest rate is based on the market sentiments, demand and supply of the token and many other factors.
- If the monthly interest rate for Tether (USDT) is 1.2%, then multiply it by 12 to get your approximate annual percentage rate (APR) (14.4%). You can also maximize your returns for the year by lending the interest received along with the principal.
Finally, you might be wondering, why lend on CoinDCX?
Why Lend Cryptos on CoinDCX?
The answer to that is very simple. Not only are we among the leading crypto exchanges in India, we offer the highest liquidity across the world’s best exchanges. The funds you lend are provided to margin traders on Margin, enabling us to provide you with the highest possible rates. You don’t need to worry about your funds when you lend them to CoinDCX. We rely on MultiSig Cold wallets for safety of the funds that are protected by BitGo’s $100 million insurance policy. No single person has access to the crypto assets that we hold. We even let investors and traders who have not done their KYC to lend their cryptocurrencies on Lend for as long as you do not withdraw fiat or cryptos worth 4 BTC in a day. Completing your KYC only helps you with a seamless, safe and secure crypto experience. Lastly, we have a no transaction fee policy when it comes to lending on CoinDCX.